B-179859, JUN 5, 1974, 53 COMP GEN 921

B-179859, JUN 5, 1974, 53 COMP GEN 921

PAY - SEVERANCE - EFFECT ON SUBSEQUENT RETIREMENT BENEFITS REGULAR AIR FORCE OFFICER WHO WAS REMOVED FROM THE ACTIVE LIST UNDER SECTION 106 OF TITLE I OF PUBLIC LAW 810, 80TH CONGRESS AND WHO RECEIVED SEVERANCE PAY UNDER THAT SECTION IS NOT BARRED FROM BEING RETIRED UNDER 10 U.S.C. 1331, UPON ATTAINING AGE 60 SO LONG AS HE IS OTHERWISE QUALIFIED TO RECEIVE SUCH RETIRED PAY. PAY - SEVERANCE - RECOUPMENT - EXCEPTION WHERE CERTAIN PROVISIONS OF LAW GOVERNING SEPARATION FROM THE ACTIVE LIST AUTHORIZE SEVERANCE PAY, AND REQUIRE REFUND OF SUCH PAY UPON RETIREMENT, BUT WHERE OTHER PROVISIONS SUCH AS 10 U.S.C. 3786 AND 8786 DO NOT STATE SUCH REQUIREMENT, IN THE ABSENCE OF SUCH A LIMITING STATUTORY PROVISION OR A CLEAR INDICATION OF CONGRESSIONAL INTENT TO THE CONTRARY REFUND OF SEVERANCE PAY IS NOT REQUIRED AS A CONDITION PRECEDENT TO THE RECEIPT OF RETIRED PAY UNDER 10 U.S.C. 1331. PAY - RETIRED - EFFECTIVE DATE - SUBSEQUENT APPLICATION EFFECT - SEAGRAVE CASE WHERE A MEMBER WHO IS OTHERWISE ENTITLED TO RETIRED PAY UNDER 10 U.S.C. 1331, BUT WHO DOES NOT FILE APPLICATION FOR SUCH PAY UNTIL WELL AFTER MEETING AGE REQUIREMENT, ON THE BASIS OF THE HOLDING IN THE CASE OF SEAGRAVE V. UNITED STATES, 131 CT. CL. 790 (1955), AND SIMILAR CASES, SUCH PAY ACCRUES FROM DATE OF QUALIFICATION OR ON FIRST DAY OF ANY SUBSEQUENT MONTH STIPULATED IN APPLICATION FOR SUCH PAY TO BEGIN, WITHOUT REGARD TO DATE SUCH APPLICATION IS FILED.

IN THE MATTER OF RECEIPT OF SEVERANCE PAY AND NON-REGULAR RETIREMENT PAY, JUNE 5, 1974:

THIS ACTION IS IN RESPONSE TO A LETTER DATED OCTOBER 10, 1973, FROM THE ASSISTANT SECRETARY OF DEFENSE (COMPTROLLER), REQUESTING AN ADVANCE DECISION AS TO THE ENTITLEMENT OF A SERVICE MEMBER TO RECEIVE RETIRED PAY UNDER THE PROVISIONS OF CHAPTER 67 OF TITLE 10, U.S. CODE, IN THE CIRCUMSTANCES DESCRIBED IN DEPARTMENT OF DEFENSE MILITARY PAY AND ALLOWANCE COMMITTEE ACTION NO. 492, WHICH WAS ENCLOSED WITH THE REQUEST.

THE QUESTIONS SET FORTH IN THE COMMITTEE ACTION ARE:

1. DOES THE RECEIPT OF SEVERANCE PAY BY A REGULAR OFFICER REMOVED FROM THE ACTIVE LIST UNDER PUB. L. 810, 80TH CONGRESS, 2ND SESSION BAR HIS SUBSEQUENT RETIREMENT UNDER 10 U.S.C. 1331 UPON HIS ATTAINING AGE 60, ASSUMING THAT PRIOR TO THE RECEIPT OF SUCH SEVERANCE PAY HE HAD PERFORMED 20 YEARS OF SERVICE COMPUTED UNDER 10 U.S.C. 1332, AND THE LAST EIGHT YEARS OF SUCH QUALIFYING SERVICE WERE PERFORMED AS A MEMBER OF A CATEGORY LISTED IN SECTION 1332?

2. IF THE PREVIOUS QUESTION IS ANSWERED IN THE NEGATIVE, IS A REFUND OF THE SEVERANCE PAY A CONDITION PRECEDENT TO HIS ENTITLEMENT TO RETIRED PAY UNDER 10 U.S.C. 1331?

3. THE FORMER OFFICER'S DATE OF BIRTH IS 29 JUNE 1903. HE HAS REQUESTED RETIRED PAY TO BEGIN 15 AUGUST 1973. IF HE IS DETERMINED ELIGIBLE TO RECEIVE RETIRED PAY, WHAT IS THE EFFECTIVE DATE PAY IS ALLOWABLE?

THE DISCUSSION IN THE COMMITTEE ACTION STATES THAT THE STATUTE WHICH PROVIDES FOR READJUSTMENT PAY FOR NON-REGULAR OFFICERS RELEASED FROM ACTIVE DUTY (10 U.S.C. 687) PROVIDES IN SUBSECTION (F) THEREOF THAT A DEDUCTION OF A PORTION OF THE READJUSTMENT PAY RECEIVED IS REQUIRED IN THE EVENT OF LATER QUALIFICATION FOR RETIRED PAY. HOWEVER, THE STATUTE WHICH PROVIDES FOR SEVERANCE PAY TO REGULAR AIR FORCE MEMBERS REMOVED FROM THE ACTIVE LIST (10 U.S.C. 8786) IS SILENT ON THIS POINT.

IN THIS REGARD, THE DISCUSSION SUGGESTS THAT THE DISTINCTION WHICH EXISTS MAY BE IN THE FACT THAT A NON-REGULAR WHO IS RELEASED FROM ACTIVE DUTY INVOLUNTARILY WITH READJUSTMENT PAY UNDER 10 U.S.C. 687 RETAINS HIS RESERVE COMMISSION AND MAY CONTINUE TO EARN CREDITS TOWARD RETIREMENT UNDER SOME PROVISION OF LAW, WHILE A REGULAR MEMBER REMOVED FROM THE ACTIVE LIST IS SEVERED FROM ALL APPOINTMENTS AND RETAINS NO CONTINUING STATUS IN WHICH HE CAN EARN ELIGIBILITY.

GENERALLY, SEVERANCE PAY IS PAYABLE TO REGULAR OFFICERS OF THE UNIFORMED SERVICES BECAUSE OF FORCED SEPARATION FROM THE SERVICE FOR VARIOUS REASONS, INCLUDING FAILURE OF SELECTION FOR PROMOTION AND ELIMINATION BECAUSE OF UNFITNESS OR UNSATISFACTORY PERFORMANCE OF DUTY, AND WHO ARE OTHERWISE INELIGIBLE TO RECEIVE RETIRED PAY, IN ORDER TO HELP THOSE WHO ARE SEPARATED TO RESETTLE IN CIVILIAN CIRCUMSTANCES.

REGULAR ARMY AND AIR FORCE OFFICERS ARE ENTITLED TO SEVERANCE PAY AS PROVIDED IN 10 U.S.C. 3786(B)(2) AND 8786(B)(2). THOSE SUBSECTIONS - WHICH WERE DERIVED FROM SECTION 106 OF TITLE I OF THE ARMY AND AIR FORCE VITALIZATION AND RETIREMENT EQUALIZATION ACT, APPROVED JUNE 29, 1948, CH. 708, 62 STAT. 1082 - PROVIDE IN PERTINENT PART:

(B) EACH OFFICER REMOVED FROM THE ACTIVE LIST *** UNDER THIS CHAPTER SHALL -

(2) IF ON THAT DATE HE IS INELIGIBLE FOR VOLUNTARY RETIREMENT UNDER ANY LAW, BE HONORABLY DISCHARGED IN THE GRADE THEN HELD WITH SEVERANCE PAY COMPUTED BY MULTIPLYING HIS YEARS OF ACTIVE COMMISSIONED SERVICE, BUT NOT MORE THAN 12, BY ONE MONTH'S BASIC PAY OF THAT GRADE.

SEVERANCE PAY IS ALSO AUTHORIZED FOR REGULAR ARMY AND AIR FORCE OFFICERS UNDER SUBSECTIONS 3303(D)(3) AND 8303(D)(3) OF TITLE 10, U.S. CODE, IN SUBSTANTIALLY THE SAME LANGUAGE AS THAT QUOTED ABOVE. IN ADDITION, SIMILAR SEVERANCE PAY PROVISIONS ARE CONTAINED IN 10 U.S.C. 6395(G), 6401(B) AND 6402(B), FOR CERTAIN REGULAR NAVY AND MARINE CORPS OFFICERS.

IN CONTRAST TO THE ABOVE, SEVERANCE PAY BENEFITS FOR REGULAR WARRANT OFFICERS (10 U.S.C. 1167(B) AND (D)) AND REGULAR NAVY AND MARINE CORPS OFFICERS (10 U.S.C. 6382(C), 6383(F), AND 6384(B)), PROVIDE BASICALLY THAT THE ACCEPTANCE OF A LUMP-SUM PAYMENT OF SEVERANCE PAY UNDER ANY OF THE ABOVE SECTIONS DOES NOT DEPRIVE A PERSON OF ANY RETIREMENT BENEFITS FROM THE UNITED STATES. HOWEVER, THESE SECTIONS FURTHER PROVIDE THAT THERE SHALL BE DEDUCTED FROM EACH OF HIS RETIREMENT PAYMENTS SO MUCH THEREOF AS IS BASED ON THE SERVICE FOR WHICH HE HAS RECEIVED SEVERANCE PAY PAYMENT UNTIL THE TOTAL DEDUCTED EQUALS THE AMOUNT OF THE LUMP-SUM PAYMENT.

IN 43 COMP. GEN. 768 (1964) WE SAID THAT THE LEGISLATIVE HISTORY OF THE PHRASE "ACCEPTANCE OF A LUMP-SUM PAYMENT UNDER THIS SECTION DOES NOT DEPRIVE A PERSON OF ANY RETIREMENT BENEFITS FROM THE UNITED STATES," SHOWS THAT ITS PURPOSE WAS TO ESTABLISH THAT THE PAYMENT OF SEVERANCE PAY WOULD NOT BAR AN OFFICER FROM LATER QUALIFYING FOR ANY OTHER TYPE OF GOVERNMENT RETIREMENT, SUCH AS RESERVE RETIREMENT UNDER TITLE III OF PUBLIC LAW 810, 80TH CONGRESS.

IN 39 COMP. GEN. 360 (1959) WHICH CONSTRUED 10 U.S.C. 8303(D)(3), A PROVISION WHICH AS PREVIOUSLY INDICATED CONTAINS LANGUAGE SIMILAR TO THAT IN 10 U.S.C. 3786(B)(2) AND 8786(B)(2), WE SAID:

*** THEIR ELIGIBILITY FOR VOLUNTARY RETIREMENT OR FOR RETIRED PAY UNDER 10 U.S.C. 1331, AND THE COMPUTATION OF THE AMOUNT OF RETIRED PAY UPON RETIREMENT, MUST BE REGARDED AS BEING GOVERNED BY THE SAME PROVISIONS OF LAW AS THOSE APPLICABLE TO OTHER MEMBERS OF THE ARMED FORCES SERVING IN A SIMILAR CAPACITY WHO HAVE NOT RECEIVED SEVERANCE PAY PRIOR TO RETIREMENT, IN THE ABSENCE OF SOME STATUTORY PROVISION REQUIRING A DIFFERENT CONCLUSION. ***

SINCE THE PRIMARY PURPOSE FOR AUTHORIZING SEVERANCE PAY TO REGULAR OFFICERS IS BECAUSE OF INVOLUNTARY SEPARATION FROM SERVICE AND TO PROVIDE A MONETARY CUSHION TO HELP THE INDIVIDUALS RELOCATE AND READJUST TO CIVILIAN PURSUITS AND SINCE CONGRESS HAS NOT IMPOSED ANY RESTRICTIONS IN 10 U.S.C. 3786 OR 8786, IT IS OUR VIEW THAT IN THE CIRCUMSTANCES SET FORTH IN THE COMMITTEE ACTION, THE PAYMENT OF SEVERANCE PAY WOULD NOT BAR SUBSEQUENT RETIREMENT UNDER 10 U.S.C. 1331, NOR WOULD REFUND OF SUCH PAY BE REQUIRED AS A CONDITION PRECEDENT TO ENTITLEMENT TO RETIRED PAY UNDER 10 U.S.C. 1331. QUESTIONS 1 AND 2 ARE ANSWERED ACCORDINGLY.

WITH REGARD TO QUESTION 3, THE DISCUSSION IN THE COMMITTEE ACTION STATED THAT THE OFFICER COMPLETED THE STATUTORY SERVICE REQUISITE FOR RETIREMENT UNDER 10 U.S.C. 1331 PRIOR TO HIS ACCEPTANCE OF A REGULAR STATUS IN 1947 AND THAT THE ONLY FURTHER STATUTORY PREREQUISITE TO HIS ACTUAL ELIGIBILITY TO RECEIVE RETIRED PAY WAS THAT HE ATTAIN 60 YEARS OF AGE. FURTHER, THAT WHILE HE ATTAINED THAT AGE ON JUNE 29, 1963, HE DID NOT FILE AN APPLICATION FOR RETIREMENT UNDER 10 U.S.C. 1331 UNTIL AUGUST 15, 1973.

IN THE CASE OF SEAGRAVE V. UNITED STATES, 131 CT. CL. 790 (1955), THE COURT HELD THAT RETIRED PAY UNDER TITLE III OF THE ACT OF JUNE 29, 1948, 62 STAT. 1087, WAS PAYABLE FROM THE DATE THE PLAINTIFF MET THE AGE AND SERVICE REQUIREMENTS FOR SUCH PAY EVEN THOUGH HE DID NOT MAKE APPLICATION THEREFOR, A CONDITION PRECEDENT UNDER THE STATUTE, UNTIL SOME TIME SUBSEQUENT TO SUCH DATE. THAT PRINCIPLE WAS FOLLOWED IN HYDE V. UNITED STATES, 134 CT. CL. 690 (1956) AND IN STEVANUS V. UNITED STATES, 138 CT. CL. 149 (1957).

IN 37 COMP. GEN. 653 (1958) WE STATED WITH REGARD TO THESE MATTERS:

*** HEREAFTER WE WILL FOLLOW THE DECISION OF THE COURT OF CLAIMS IN THE SEAGRAVE CASE AS A PRECEDENT IN THE SETTLEMENT OF SIMILAR CLAIMS AND WE WILL NOT QUESTION OTHERWISE PROPER PAYMENTS OF RETIRED PAY MADE IN ACCORDANCE WITH THE RULE ESTABLISHED BY THAT DECISION. ***

THEREFORE, IN THE SITUATION WHERE A MEMBER IS OTHERWISE FULLY QUALIFIED TO RECEIVE RETIRED PAY FOR NON-REGULAR RETIREMENT, BUT DOES NOT FILE AN APPLICATION FOR SUCH RETIRED PAY UNTIL WELL AFTER HE HAS MET THE AGE REQUIREMENTS, SUCH PAY STILL ACCRUES FROM THE DATE THE MEMBER QUALIFIES BY REASON OF AGE AND SERVICE FOR SUCH PAY OR ON THE FIRST DAY OF ANY SUBSEQUENT MONTH STIPULATED BY THE MEMBER IN HIS APPLICATION, WITHOUT REGARD TO THE DATE OF SUCH APPLICATION. SEE 48 COMP. GEN. 652 (1969).

QUESTION 3 IS ANSWERED ACCORDINGLY.